IWH-Tarif-Check
IWH-Tarif-Check The IWH-Tarif-Check (IWH Wage Rate Check) analyses the real income...
See page
Brown Bag Seminar
Brown Bag Seminar Financial Markets Department The seminar series "Brown...
See page
Speed Projects
Speed Projects On this page, you will find the IWH EXplore Speed Projects in...
See page
Ludwig (Interview)
About the CIA and a glass of red wine ... Professor Dr Udo Ludwig on the...
See page
The Political Economy of the European Banking Union
The Political Economy of the European Banking Union ...
See page
IWH-CompNet Discussion Papers
IWH-CompNet Discussion Papers The IWH-CompNet Discussion Paper series presents research...
See page
Publications
Tracking Weekly State-Level Economic Conditions ...
See page
The Real Effects of Universal Banking: Does Access to the Public Debt Market Matter?
Stefano Colonnello
Journal of Financial Services Research,
February
2022
Abstract
I analyze the impact of the formation of universal banks on corporate investment by looking at the gradual dismantling of the Glass-Steagall Act’s separation between commercial and investment banking. Using a sample of US firms and their relationship banks, I show that firms curtail debt issuance and investment after positive shocks to the underwriting capacity of their main bank. This result is driven by unrated firms and is strongest immediately after a shock. These findings suggest that universal banks may pay more attention to large firms providing more underwriting opportunities while exacerbating financial constraints of opaque firms, in line with a shift to a banking model based on transactional lending.
Read article
Stress-ridden Finance and Growth Losses: Does Financial Development Break the Link?
Serafín Martínez-Jaramillo, Ricardo Montañez-Enríquez, Matias Ossandon Busch, Manuel Ramos-Francia, Anahí Rodríguez-Martínez, José Manuel Sánchez-Martínez
IWH Discussion Papers,
No. 3,
2022
Abstract
Does financial development shield countries from the pass-through of financial shocks to real outcomes? We evaluate this question by characterising the probability density of expected GDP growth conditional on financial stability indicators in a panel of 28 countries. Our robust results unveil a non-linear nexus between financial stability and expected GDP growth, depending on countries’ degree of financial development. While both domestic and global financial factors affect expected growth, the effect of global factors is moderated by financial development. This result highlights a previously unexplored channel trough which financial development can break the link between financial (in)stability and GDP growth.
Read article
